McKinsey & Company: Next Generation Digital Supply Chain

 The Internet of Things (IoT), advanced robotics, automated technology, big data and more innovations are shaking up the supply chain industry every day. These trends, that come under the Industry 4.0 umbrella, can bring huge benefits to companies. But they are not without their disruptions and challenges to overcome.

As these trends and technologies continue to disrupt the industry and improve performance, changing customer expectations have forced everyone else in the sector to adapt. Keeping up with these trends is essential to survival and success, and getting ahead of the curve with the next effective disruptor could propel a supply chain to the very top.

Supply Chain 4.0 will be faster, capable of reducing delivery times to just a few hours. Faster deliveries depend on forecasting approaches and predictive analytics, which can take market trends, weather, holidays, construction works and more all into account, providing an accurate forecast of customer demand. 

Predictive shipping is the future for faster deliveries. Amazon holds a patent for this - it will ship products before the order has even been placed, matching the customer order to a shipment at a later date, with the product already in the logistics network, in transport towards the location of the consumer.

Future supply chains will also be far more flexible and agile. Real-time planning will enable this flexibility, with the ability to react to changing demand or supply situations made easy. Frozen periods and planning cycles can be minimised, whilst planning becomes a continuous process, capable of reacting to changing requirements.

Increased flexibility throughout the delivery and logistics processes can allow for customers to reroute shipments after they’ve been sent, relocating them to a more convenient location.

As supply chains continue to produce more and more data from their operations, it will become increasingly important for them to become more accurate. For this to happen, Supply Chain 4.0 will usher in the next generation of performance management systems, capable of providing real-time, end-to-end transparency throughout the supply network.

These management systems will be able to track supply chain information right down to the exact location of trucks as they’re on delivery runs. Such a range of data can provide suppliers with a join information basis that anyone can access in the supply chain.

By integrating suppliers, service providers and more into a supply chain cloud, all stakeholders can see the data and make decisions based on the same facts that everyone can see, meaning decisions can be more accurate and effective for everyone concerned.

Check out McKinsey’s report here to find out more about the future of the digital supply chain.